Orphan Drugs: Cost vs. Quality of Life

In Clinical Development, Market Access, Partnering & Investment, Regulation & Government by André SingerLeave a Comment

After speaking to payers from different countries and different profiles – government, public and private insurance companies – about the current obstacles to grant a better access of orphan drugs by rare disease patients, it is clear that there is no such ideal solution to achieve that goal while maintaining payers’ financial sustainability. When I heard Charles Shasky’s presentation at the World Orphan Drug Congress USA in DC last April – Mr. Shasky is the Head of Pharmacoeconomic Comparative Effectiveness Research at Aetna – I could understand why this issue is so complex. There seems to be a formula which allow payers to relate cost to value for orphan drugs reimbursement, which is based on a drug’s impact on disease quality. This would serve ideally for payers to achieve greater financial stability while granting access to orphan therapies by their clients. However, the current healthcare system in the US doesn’t allow “quality” to be used as a metric. So what other metrics and ideas could payers rely on to address this issue? One suggested by Charles is to narrow and optimize the communication between pharma and biotechs with the insurance companies. This would allow payers’ to be aware of promising orphan drug candidates which are likely to receive approval by regulators in advance, with the option to invest in that company, through bonds or stocks for example. Once that drug becomes approved – there’s obviously a risk involved in it, but minor if compaired to the current reimbursement scenario – that investments gets paid off, and the insurance company benefits from continuous sales revenue PLUS competitiveness score since other payers would be reimbursing that particular treatment. These are the kind of out-of-the-box ideas that can help the entire orphan drug industry move forward to continuously benefit the rare disease patients population.

After speaking to payers and regulators from different countries about their role in granting better access of orphan drugs for rare disease patients, it is clear that there is no ideal solution. to achieve that goal while maintaining payers’ financial sustainability.

Charles Shasky’s, Head of Pharmacoeconomic Comparative Effectiveness Research at Aetna talked about a  formula which allow payers to relate cost to value at the World Orphan Drug Congress USA in DC last April. Payers obviously need to sustain themselves financially while providing access to drugs; in this instance high-priced orphan drugs to rare disease patients. However, improving a patient’s quality of life is difficult to measure and the US healthcare system does not include this in the assessment.

Chuck suggested for pharma and biotechs to sit down with payers to try and narrow the disparity between the quality of life orphan drugs often target as opposed to cure; along with a justification for the high pricing of such drugs. But one very novel idea Chuck presented was for biotechs to keep payers informed about their studies and developments so payers’ could even invest in these developments; biotechs get the capital that they need, and the insurance company benefits from continuous sales revenue PLUS remain competitive since other payers would be reimbursing the same.

I remember another idea Chuck mentioned outside of the conference arena but on a call we had while preparing for the agenda: to pool insurances together so the high cost of an orphan drug gets spread out better.

PDUFA, FDASIA, HTA and Obama Healthcare discussions continue to evolve and we expect changes every now and then. We hope they’ll be change for the better and a clearer interpretation for better implementation but we all agree that the one goal is to provide improved access to orphan drugs.

Forums like these encourage open discussions which we can, if merited, bring to a larger and face-to-face forum at the World Orphan Drug Congress USA in 2014. So feel free to chime in and let us know what you think.

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